Hello! I wont be able to answer all your questions but I know for a fact that the graphics are way better then the 2002 woo game. I use a keyboard to play but it gets hard. There are so many options plus there are so many addons you can download, late models, dirt modfieds, imca modifieds, sprint cars, wingless. I hope this helps. Here is a message board for sim racing, best place to ask questions, people are really nice and you can look at some cars that were painted.

I have read some posts on here about Rfactor and it has raised my curiousity about the game. If I were to get it, is it close to the graphics of the 2002 World of Outlaw game or even better? Answer: It's alot better.
Also, what will I need in order to play it, a steering wheel, joystick, or just the keyboard?Answer: you can use the keyboard but a joystick or wheel is alot easier.
If you pay the $39.99 to activate it, how many other expenses will there be to get sprint cars, tracks, etc? Answer: you just pay the 39.99 everything else is free.